Otto von Bismarck, the Prussian prime minister/German chancellor from 1862 to 1890, is the modern father of the prevailing worldview that government should serve as a social services institution by taking money from the wealthy and from business to give to those who are not as advantaged. On the Social Security Administration website, Bismarck is heralded as a visionary who introduced social insurance to "promote the well-being of workers in order to keep the German economy operating at maxim efficiency, and to stave-off calls for more radical socialistic alternatives." He initiated the concept of big and ever-expanding government as a primary means of social services, which was imported to the United States by President Roosevelt's "New Deal," expanded further with Lyndon Johnson's "War on Poverty," and picked up again, many argue, in the Obama administration's mantra of "Change." While calling the Obama administration a band of socialists sounds extreme, calling the administration Bismarckian seems unquestionable.
Bismarck's approach remains popular because political responses to economic crises tend toward higher taxation of the wealthy and increased centralization. Nineteenth-century Europe found itself in transition from agrarianism and feudalism to industrialization-a transition that created new economic pressures demanding fresh perspectives on political economy. A radical and often violent form of Marxist socialism began to rise all over Europe that threatened the stability and unity of many young nations like Germany, Italy, and the Netherlands. To fight off socialism, Bismarck proposed a system where government provides an economic safety net using high taxes on business and the wealthy to meet the needs of the poor.
In 1891, William Dawson, in Bismarck and State Socialism, explains that Bismarck believed that it was the positive duty of the State to promote the welfare of all its members, especially the poor. This led to a national system of insurance that provided funds for people when they were sick and could not work, when they suffered work-related accidents, and they became senior citizens and were unable to work. Bismarck believed that working was a human right, and if people were unable to work, government should take money from businesses and the wealthy to give to them. If this sounds familiar, it should. Bismarck's experiment led to our own Medicaid, Medicare, disability insurance, workers' compensation, welfare, and the conceptual framework for universal healthcare.
The United States has undergone Bismarckian restructuring since the 1940s, and it is now unquestioned dogma in the West that the wealthy should bear the financial cost of meeting the needs of the poor by force instead of by virtue, love, choice, or charity. Bismarck did not value a role for civil-society institutions, like the church, in meeting the needs of the poor.
Is the Obama administration a band of 19th-century Marxists and socialists? No. Is the Obama administration attempting deal with economic crisis in a Bismarckian fashion? Absolutely. Even though Germany abandoned Bismarck's vision by the 1890s, because they were ideas that did not work in practice in the long run, the hope that these measures bring prosperity still linger. Welcome to Bismarck-nation.